September 22, 1994

MARK PAZNIOKAS; Courant Staff Writer


A prominent labor leader, Dominick Lopreato, arranged for $8 million in union pension funds to be invested with Colonial Realty Co. in return for $345,000 in bribes, according to a federal indictment unsealed Wednesday.

Lopreato then conspired with the company's founder,, Benjamin Sisti and Jonathan Googel, to conceal the bribes after Colonial's spectacular failure attracted federal investigators, the indictment says.

The eight-count indictment charges Lopreato with two counts of accepting bribes as a pension plan trustee, three counts of filing a false tax return, two counts of perjury, and one count of conspiracy.

FBI and IRS agents arrested Lopreato, a longtime official of the Laborers' International Union and a trustee of its pension plan, at 6:30 a.m. Wednesday at his Bushnell Tower condominium in downtown Hartford.

Lopreato, 59, who faces up to 30 years in prison and $2 million in fines, declined to comment after he was presented before U.S. Magistrate Judge Thomas P. Smith in Hartford and released on a $100,000 non-surety bond.

The arrest was coordinated with the disclosure two hours later that Ronald J. Welch of West Hartford, who describes himself as Lopreato's best friend, is prepared to testify he delivered cash from Colonial to Lopreato on three occasions.

Welch's cooperation became public Wednesday morning when he waived his right to be indicted and pleaded guilty before U.S. District Judge T.F. Gilroy Daly in Waterbury to tax fraud and aiding and abetting the payment of a bribe.

Lopreato is the first public figure to be indicted in the Colonial scandal since authorities disclosed in June 1993 that Sisti and Googol each had pleaded guilty to four felony counts and were cooperating with investigators.

Accountants, lawyers, politicians, labor leaders, stockbrokers, bankers and business executives who may have had illegal or questionable dealings with Colonial were believed vulnerable once Sisti and Googel became informants.

Colonial grew into a real estate colossus in the 1 980s, buying and syndicating to investors more than a billion dollars in real estate in Connecticut and around the nation. But former employees said after the company's collapse that the secrets of its success included securities fraud and bribes to public and private officials.

After Sisti and Googel cut their deal, one longtime Colonial employee predicted, ''They are going to rat everyone out."

Information from Sisti and Googel, who have yet to be sentenced, helped lead investigators to Welch, who in turn agreed this summer to provide testimony against his old friend Lopreato. "It was a heartbreaking and gut- wrenching decision" by Welch to give evidence against Lopreato, said Jeremiah Donovan, Welch's lawyer.

Jon Googel was one of his best friends and so was Dominick," Donovan said. Ron is one of the little people who gets caught up in this enormously lucrative scam, whose life is wrecked by it. Now he's trying to do the right thing."

Prosecutors told Daly that Welch delivered about $45,000 to Lopreato in June 1988 after the union invested $2 million with Colonial, then $150,000 in September 1989 after a $3 million investment, and another $150,000 in May 1990 after a second $3 million investment.

The Laborers' union in Connecticut invested $S million; an affiliate in Albany, N.Y., invested $3 million on Lopreato's recommendation, prosecutors said.

At the time, Lopreato was the business manager or top leader of the Connecticut Laborers' District Council, the statewide umbrella for locals of the Laborers' International Union, which represents construction workers. He held the same position with Local 230.

He resigned as business manager last summer after he admitted accepting a Rolex watch from Googel, but he kept the title of secretary- treasurer. The admission, ironically, came during a deposition Lopreato gave in the civil lawsuit the union filed against Colonial after the union lost its investment.

The indictment charges that Lopreato broke federal law by accepting the bribes and also by accepting the Rolex, a gold presidential model with an appraised value of $1 1,700. It also says Lopreato lied under oath twice while giving the deposition and that he failed to report the bribes as income.

Lopreato also is accused in the indictment of hindering the investigation of Colonial. Named as unindicted conspirators are Welch, Googel, Sisti and Sisti's son, Kevin Sisti.

Lopreato had meetings with Welch and Colonial's principals at Hartford area restaurants, where they would coordinate the stories they planned to tell the FBI, according to the indictment. The last meeting was in September 1992, about eight months before Sisti and Googel agreed to cooperate with authorities.

Lopreato met that month with Googel and Welch across from the Hartford Civic Center, at Frank's Restaurant, and then at a bar in the Goodwin Hotel. Once again, they agreed to stick by their story: Lopreato had been paid nothing, the indictment states.

But the unity fell apart under continuing pressure from authorities -- and the prospects of long prison sentences.

Under federal guidelines, which give judges little leeway in sentencing, cooperating with authorities is one of the few ways a defendant can win a lesser sentence. Welch faces a maximum sentence of six years in prison.

Assistant U.S. Attorney Thomas J. Murphy, one of the prosecutors leading the investigation of Colonial by the FBI, the IRS and the Department of Labor, declined to say whether Lopreato's indictment would be followed by others.

"The investigation is continuing," he said.

Sisti and Googel are scheduled to be sentenced Dec. 9, but the sentencing could be postponed -- as it has been before to the dismay of angry investors who lost their life savings in Colonial deals.

The simple answer," Murphy said of the delay in sentencing, is we are waiting for them to complete their cooperation."

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